Foreign aid 'moving away from hand-outs'

Australia's foreign aid spend will be more focused and effective with the melding of AusAID into the Department of Foreign Affairs and Trade, according to Foreign Minister Julie Bishop.

The Liberal government has come under fire for effectively scrapping AusAID and cutting the nation's foreign aid program but Ms Bishop says it will result in better outcomes.

"We believe there should only be one foreign agency under a government and we need to ally all of our interests and our effort and our resources," the foreign minister told the annual conference of the West Australian Liberal branch on Saturday.

"I believe we will see a more effective use of aid that will make a difference in the region.

"I don't believe it's acceptable for Australia to continue to pay billions of dollars and billions of dollars each year in aid and for the recipient countries to not meet one of the Millennium Development goals that were set for 2015."

She said Australia's foreign aid budget was still generous, "but focusing on economic empowerment, not hand-outs".